Andreessen Horowitz, one of Silicon Valley’s foremost venture capital firms, is looking to raise up to $ 1 billion in fund to invest in cryptocurrencies and crypto start-ups, following the success of its investment in Coinbase.
The new fund, Andreessen’s third to focus on cryptocurrency investments, aims to raise between $ 800 million and $ 1 billion from investors, according to four people familiar with the process.
This would make it one of the largest dedicated crypto capital pools and potentially twice the size of its predecessor. The firm declined to comment.
Andreessen’s fundraising push comes as other cryptocurrency investors raise large war chests, spurred on by a booming market for bitcoin, ethereum and other digital assets.
Cryptocurrency venture capitalists have started making gains thanks to Coinbase, the digital currency exchange office that went public earlier this month and is currently valued at nearly $ 60 billion, and direct investment in virtual currencies that have appreciated in value over the past 12 months.
These returns have encouraged institutional investors such as endowments and foundations to renew their bets on emerging technologies, despite the uncertain regulatory environment across large parts of the market.
Pantera Capital, one of the first cryptocurrency investment firms, aims to raise $ 600 million for a new blockchain fund that will combine investments in private companies and tradable tokens, it said.
Pantera’s latest venture capital fund raised $ 175 million in 2018 and was worth 3.8 times that amount in January, according to its website.
Last month, investors including Sequoia Capital China pledged $ 225 million in the second cryptocurrency fund raised by Dragonfly Capital, more than double the amount Dragonfly raised for its first release in 2018.
Andreessen’s fundraising would rival the pool of capital raised by Paradigm, a cryptocurrency investment firm started by Coinbase co-founder Fred Ehrsam and former Sequoia Capital partner Matt Huang in 2018.
Paradigm has raised a total of $ 1 billion from investors, including endowments from Harvard and Yale universities, according to PitchBook data. The company invests from a variable capital fund structure that does not require it to repay the capital on a fixed date.
Coinbase’s direct listing on the Nasdaq stock exchange this month produced a boon for early investors and employees, who sought to reinvest their earnings in new businesses. The company’s market value hit $ 75.9 billion at the start of the session, although it fell about 20% as private shareholders offload their stakes.
Founded in 2009 by Marc Andreessen and Ben Horowitz, Silicon Valley-based Andreessen Horowitz was an early investor in cryptocurrency groups such as Coinbase and Ripple through its traditional funds.
Andreessen’s stake in Coinbase was one of his biggest successes and was worth $ 11.2 billion at the price of the exchange’s first trades. The company has sold nearly $ 120 million of shares since Coinbase went public, according to regulatory filings.
After raising his first dedicated cryptocurrency fund in 2018, Andreessen became a major investor in so-called decentralized funding projects and was one of the founding members of the Facebook-backed Libra project, now known as Diem. .
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Andreessen converted to a registered investment advisor in 2019, a regulatory distinction that gave him more flexibility to invest in cryptocurrencies and other assets that venture capital funds typically cannot hold in large amounts. . The company managed $ 35.8 billion in regulatory assets at the end of last year, according to a filing.
At the top of its fundraising range, Andreessen’s third cryptocurrency fund is said to be almost double the size of its latest vehicle, which raised $ 515 million a year ago.
